Patna High Court - Orders
M/S Nepal Shalimar Cement Pvt. vs The Union Of India & Ors on 6 August, 2014
Author: Ramesh Kumar Datta
Bench: Ramesh Kumar Datta
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.15991 of 2010
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M/s. Nepal Shalimar Cement Pvt. Ltd., a Private Limited Company having
its office at Adarsha Nagar P.O. & P.S. Birganj, Nepal through its Director
Sri Raj Kumar Baidya, S/O Late Nathmal Baidya, R/O Adarsha Nagar, P.O.
& P.S.- Birganj, Distt.- Parsa, Nepal
.... .... Petitioner
Versus
1. The Union of India through the Secretary, Ministry of Railway,
Government of India, New Delhi
2. The General Manager, East Central Railway, Hazipur
3. The Chief Commercial Manager, East Central Railway, Dighi Khurd, B-
Block, Hazipur
4. The Goods Superintendent, Raxaul (Goods), East Central Railway,
Raxaul
5. The Chief Goods Superintendent (TWS/Goods), South Eastern Railway,
TISCO Work Site, Tata Nagar, Jamshedpur
6. The General Manager, South Eastern Railway, Garden Reach Kolkata -
700043
.... .... Respondents
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Appearance :
For the Petitioner/s : Mr. Gautam Kumar Kejriwal with M/S Priya
Gupta & Hemant Kumar, Advocates
For the Respondent/s : Mr. Bindhyachal Singh & Parijat Saurav,
Advocates.
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CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA
ORAL ORDER
8 06-08-2014Heard learned counsel for the petitioner and learned counsel for the respondent-Railway.
The petitioner seeks quashing of the notice of demand dated 1.8.2010 issued by the Goods Superintendent, Raxaul, East Central Railway calling upon the petitioner to pay an amount of Rs.16,21,129/- by way of overload punitive charges in terms of Section 73 of the Railways Act, 1989 as also notice of demand dated 13.7.2010 issued by the Chief Goods Superintendent, South Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 2 Eastern Railway for payment of overloading charges for the same transaction and for consequential relief.
The facts of the case lie within a narrow compass and are not in dispute. The petitioner had loaded the consignment of wet slag from Tata Nagar Railway Station to Raxaul railway siding on 7.4.2010 under RR No. 212006502 dated 7.4.2010 in which the gross weight declared by the petitioner at the time of loading was 3828 M.T. It is not in dispute that no weighment of the goods was made at the loading station. The goods in question are alleged to have been weighed by the respondent Railways at the railway weighbridge at Ram Kanali during the course of tranportation of the goods without any intimation to the petitioner. It is the stand of the respondents that the wagons were found to be overloaded during the course of the said weighment at Ram Kanali. However, it is not in dispute that the consignment was delivered to the petitioner Raxaul railway siding without intimating to the petitioner regarding the fact of reweighment finding overloading of the wagons in question. The petitioner had admittedly paid all the dues before the consignment was released as per the weighment given in the railway receipt and admittedly no reweighment was done at the destination station before the goods were delivered. Nearly three months thereafter a demand Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 3 notice dated 13.7.2010 was received by the petitioner from the Chief Goods Superintendent, South Eastern Railway by which the petitioner was asked to pay by way of overload punitive charges a sum of Rs.21,80,135/- on account of the excess weight found with respect to the wagons carrying the aforesaid consignment of wet slag which had been detected in the course of reweighment at Ram Kanali railway weighbridge. Again in August, 2010 another impugned demand notice dated 1.8.2010 was issued under the signature of the Goods Superintendent, Raxaul by which a demand of Rs.16,21,129/- was made towards the punitive charges with respect to the consignment having been transported along with a calculation sheet consisting of the reweighment details of the wagons at railway weighbridge at Ram Kanali.
In its counter affidavit the respondent Railway has stated that the demand notice dated 13.7.2010 was issued by the Chief Goods Superintendent, South Eastern Railway for an amount of Rs.21,80,135/- towards punitive charges against the excess weight found over the wagons carrying the consignment of wet slag detected upon reweighment done at Ram Kanali Railway Weighbridge and in respect of that another demand notice dated 1.8.2010 for an amount of Rs.16,21,129/- was issued by the Goods Superintendent, Raxaul.
Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 4
The stand of the petitioner is that the right of the Railways to levy punitive charges for overloading of wagons is covered by the provisions of Section 73 of the Railways Act, 1989 and if any such overloading beyond permissible weight is found the Railway Administration may, in addition to the freight and other charges, recover from the consignor, the consignee or the endorsee, as the case may be, charges by way of penalty at such rates only before the delivery of the goods and not thereafter. It is further submitted by learned counsel that if at all there had been any discovery of overloading at the intermediary station at Ram Kanali where reweighment had been allegedly done then the respondents ought to have offloaded the goods in terms of the proviso to the said Section and recovered any charge thereon and in no way it is open to the railway administration after delivery of the goods to subsequently raise any further bill on account of overloading even with regard to the freight and other charges not to speak of charges by way of penalty.
Learned counsel also relies upon the provision of Section 79 of the Railways Act which, according to him, gives a right to the consignee or endorsee to have the consignment weighed on payment of necessary charges which could not be availed of by the petitioner as no weighment was made at the time Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 5 of delivery of the goods and had thereafter become impossible for availing the opportunity by the petitioner because of the laches on the part of the railways.
Learned counsel also refers to the certificate dated 30.4.2010 issued by the Goods Superintendent, Raxaul in which it is stated that no dues are pending against the petitioner with respect to the consignment in question which shows that till the end of April no such demand was in the contemplation of the Railways.
Learned counsel further submits that non-intimation to the petitioner about the overloading before the goods were delivered has led to violation of the principles of natural justice as the petitioner has no remedy left before him to satisfy the railway administration regarding the actual weight of the consignment.
Learned counsel for the petitioner in this regard relies upon the provisions of paragraphs 1737, 1437, 1740 and 1820 of the Indian Railway Commercial Manual.
Learned counsel for the Railways, on the other hand, submits that the actions of the respondents are in terms of the provisions of the Railways Act and other instructions issued by the Railway Board and Zonal Headquarters from time to time. It is submitted that in terms of the provisions of Sections 65, 66, 72, 73 Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 6 and 79 of the Railways Act the railway administration has rightly acted in the matter.
It is urged that under Section 65 of the Act if the consignment, as in the present matter, has not been checked at the time of loading with respect to weight by the railway administration then the burden of proving the weight shall lie on the consignor, the consignee or the endorsee.
It is further submitted that under Section 73 of the Act the railway administration has an authority to recover punitive charges by way of a penalty in case the goods have been loaded by a person in a wagon beyond the permissible capacity as has been laid down in terms of the provisions of Section 72 of the Act.
It is also the stand that the petitioner had not made any request under Section 79 of the Act for reweighment of goods and thus no benefit can accrue to the petitioner on that account.
Learned counsel submits that under Section 78 of the Act the authorities of the Railways have a right before delivery of the consignment to re-measure, re-weigh or re-classify any consignment and re-calculate the freight and other charges and correct any other error or collect any amount that may have been omitted to be charged and thus the weighment of the goods during the course of transit at Ram Kanali Weighbridge is in accordance Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 7 with the provisions of the Act and the Railways would have every right to recover the charges on account of such overloading.
It is also the stand of the Railways that under Section 83 of the Railways Act the Railways have a lien for freight or any other sum due against any consignor, consignee or endorsee and it is entitled to recover the same by exercising such lien and that has been done in the present matter by subsequently issuing demand notice to recover the charges.
Learned counsel for the Railways contends that apart from the right to lien the Railways also have the right to recover under Section 86 of the Act any freight, charge, amount or other expenses due to it and thus the action of the Railways is in accordance with the Railways Act.
Learned counsel for the Railways further submits that the right to natural justice in the case of the petitioner is taken care of in the present matter on account of the post decisional hearing that would be available to him pursuant to the demand notice that has been raised against him. In support of his stand learned counsel for the Railways relies upon a decision of a learned Single Judge of Gujarat High Court in the case of Action Committee for Resolving Gujarat Salt Manufactures vs. Union of India : (2005) 1 GLR 889, in paragraphs 10 and 17 of which it has been held as Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 8 follows :
"10. It is true that as expressly provided under Section 73 of the Act, the language used by the legislature is "before the delivery of the goods" and, therefore, one of the modes provided for recovery of punitive charges for overloading of the wagons would be of before the delivery of the goods. As per the proviso to Section 73 of the railway administration has power to unload the goods loaded beyond the capacity of the wagon, if detected at the forwarding station or at any place before the destination station and to recover cost for such unloading and any charge for detention of any wagon and, therefore, it cannot be said that once the goods are already delivered, even if there was a case for overloading, the punitive charges are not recoverable at all by the railway administration from the consignee or consignor or endorsee as the case may be. However, if the goods are already delivered at the destination point and any charges are to be recovered by railway as per Section 73, such right of recovery shall be subject to additional measure of right of lien under Section 83 in respect to the same consignor or consignee or endorsee. If the situation arises to the extent that the Railway administration is not in a position to exercise the right of lien, then in that case as per the Scheme of the Act there is no express enforcement provided for recovery of such punitive charges as contemplated under Section 73 and the option available to the railway would be for recovering the amount by resorting the normal remedy. Therefore, Mr.Nanavati is not right in submitting that the demand notices are ultra vires to the scope and ambit of Section 73 of the Act as the goods are already delivered. Even after the delivery of the goods, the charges for overloading if ultimately found, are recoverable by the railways from the person concerned either by exercising the lien as contemplated under Section 83 or any other remedy by resorting to the normal mode or recovery of the amount. Therefore, the said contention of Mr. Nanavati that the action is ultra vires or beyond the scope of Section 73 of the Act cannot be accepted. However, the aforesaid would be subject to the rider that in the event the right of lien is to be exercised by the railway authority against the person Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 9 concerned and if the person concerned is aggrieved of such action on the part of the railway authority, it would be for such person concerned to resort to appropriate proceedings before the appropriate forum and to establish that such punitive charges are not recoverable for overloading and, therefore, no lien can be exercised by railway administration. The aforesaid would be in a matter where the railway has accepted the goods or the wagons are loaded on "said to contain" basis. As such the situation of recovering punitive charges for overloading of the wagon would arise only in the case where goods are not weighed or checked by railway authority at the time of loading to the consignee and the railway receipt is on the basis of "said to contain". As per Section 65(2) of the Act the railway receipt is the prima facie evidence of the weight, but as per the proviso of the said Sub-section (2) of Section 65 in case of consignment in wagon loaded or train and the weight or packet is not checked by railway servant authorized in this behalf, a statement to that effect is recorded in the receipt by him, then the burden for proving the weight or the number of packets, as the case may be, shall lie upon the consignee or the consignor or the endorsee. Therefore, if the wagons are loaded and the railway servant authorized in this regard has not checked and the railway receipt is issued on the basis of "said to contain" the burden would lie upon the consignee or consignor or endorsee as the case may be and, therefore, unless there is a prohibitory order of the competent forum for preventing the railway from exercising the right of lien under Section 83 of Railway Act the punitive charges decided as per Section 73 of Railway Act are recoverable by exercising the right of lien.
17. As such the liability to pay punitive rate would accrue the moment it is found by the railway administration that there is overloading of the goods in the wagon. After the off-loading it would be required for the railway administration to immediately intimate the consignor regarding overloading and also offloading of the goods. If such an intimation is given by railway administration to the person concerned the same would enable the consignor to exercise the option through Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 10 consignee or endorsee at the destination station for weighment as per the Rules of 1990 in the event even such consignor is of the view that there was no overloading at all. Further, such intimation will also enable the consignor to make the payment of punitive charges and charges for offloading of goods in case he wants to avoid the disposal of the offloaded goods by railway administration with a view to realize the punitive charges and also offloading charges etc. Therefore, it appears that at that stage after offloading, there would be applicability of the principles of natural justice to that extent. Such principles of natural justice can further be applied to the extent that the consignor may submit explanation contending that there was no overloading and the material if any available with him to support the said stand and it will be for the railway administration to consider the same and to immediately decide as to whether overloading was there in the wagon or not. However, merely because the explanation is not accepted, the same would not give a cause of action to the consignor to challenge the decision of the railway administration with a view to avoid the payment of punitive rates and other charges as per the scheme of Section 73 of the Act. It further appears that in case the railway administration has not accepted the explanation of the person concerned, the Railway Authority will so intimate to the consignor or the person concerned before actual delivery by forwarding the proof of en route weighment and the collection of the punitive charges and other charges which are proposed to be recovered before delivery. If the intimation is so given railway administration shall be within its power and right to recover such punitive charges and other charges for off-loading etc. as the case may be before actual delivery of the goods. It goes without saying that in case as per the Rules of 1990 weighment of the consignment at the destination station if it is opted and the option is accepted and upon the weighment of the consignment at the destination station it is found that the goods offered to the consignee or endorsee are less than the quantity of the goods entrusted of carriage, the consignor or consignee or the endorsee, as the case may be would be entitled to set off to that extent and no punitive charges will be recoverable in case if the Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 11 quantity is found short but the reduction of punitive charges shall be in proportion that to. If ultimately it is found by the railway administration that any punitive charges and other charges for offloading of the materials etc., as the case may be are recoverable, the railway administration shall be within its right to recover the same before its actual delivery. In the event if for one reason or another the delivery is already given, then in that case as observed earlier if the right of lien is not available to the railway in case of non- availability of subsequent consignment, the only option available to the railway administration would be to file appropriate suit for recovery of the amount from the person concerned. However, if as observed earlier right of lien is available, the railway administration may exercise such right on the subsequent consignment of such consignor or consignee or the endorsee as the case may be as per Section 83 of the Act. In case the consignor or consignee or endorsee from whom punitive charges are recovered either before the actual delivery or by exercising right of lien by railway administration and if such consignor or consignee or endorsee is aggrieved by such action of the railway administration, the course available would be to challenge the said action before the appropriate forum. At this stage the reference may be made to Section 86 of the Act which reads as under :
"Notwithstanding anything contained in this Chapter, the right of sale under Secs. 83 to 85 shall be without prejudice to the right of the railway administration to recover by suit, any freight, charge, amount or other expenses due to it.""
Learned counsel for the petitioner, on the other hand, seeks to rely upon a decision of the Jharkhand High Court in the case of Jyoti Enterprises vs. Union of India and others : AIR 2003 Jharkhand 48, in paragraph 5(iii), 7 and 8 of which it has been held as follows :
Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 12
"5(iii) In third case that excess weight of 20 MT is not off-loaded and is sent to DS. At DS delivery is made without re-weighment and without information of detection of excess weight to the endorsee and no claim is made at that time for extra freight etc. After some time the claim is raised. The endorsee can stick to his claim of the correctness of senders weight even though dishonestly the physical verification of actual delivered has become impossible. Excepting on some paper which are in exclusive custody of respondent, there is no other way left to railway to prove what its weight was. There is no reason to disbelieve the claim of endorsee. Matter becomes disputed and suspicious, re- weighment was not made in presence of endorsee etc. Transparency is wanting. In such a situation, claim based on the re-weighment en route in absence of the endorsee causes prejudice to endorsee and therefore, it is a violation of principles of natural justice.
The third situation has occurred in the instant case and this situation is a creation of Railway employees. Whenever such situation occurs, it is violative of principles of natural justice. This question is answered accordingly.
7. BY now, we have noticed that a number of safeguards in the form a Rules 1740, 1820, 1737 and of Section 65 (2), instructions on the railway receipts giving a clear advice for re-weighment before delivery etc. have not at all been followed by the respondents in the spirit in which they should have been followed. We have also found that how due to the lapses on the part of the respondents at every stage, right at the station of re-weighment till the point of delivery of the goods, the negligence in complying with those provisions have been glaring. We have also found that in the aforesaid circumstances, the verification of the claim of overloading became impossible and thus the claim is merely based on paper in the hands of the railways itself and thus became suspect and amounted to violation of the principles of natural justice. The lien as created under Section 83 of the Railway Act (supra) is a statutory lien. "Statutory liens, however, have been looked upon with jealousy, and generally will only be Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 13 extended to cases expressly provided for by the statute, and then only where there has been a strict compliance with all the statutory requisites essential to their creation and existence (25 Anecyc 662," quoted from Law Lexicon by P. Ramanatha Aiyer, 1997 Edition, page 734 ). "
8. I have already noticed that all the statutory requisites, (Rules 1740 etc. supra) which are for safeguarding the interest of the railways and also for maintaining the transparency has been most carelessly not complied with. Consequently, it has to be held that in absence of compliance/observance of the statutory requisites, a lien is not created in favour of the respondents. Even though the lien is wide, but it can only be exercised if the requisites as provided under the Act and the Rules have been strictly complied with. The answer of this question is thus given accordingly and against the respondents."
I have considered the submissions of learned counsels for the parties as also the judgments relied upon by them. So far as the case decided by the Gujarat High Court is concerned, the same related to off-loading of the goods at an intervening station when after reweighment the wagons had been found to be overloaded. In the said context the learned Single Judge of the Gujarat High Court had rendered his decision. In the case of Jyoti Enterprises (supra) decided by a learned Single Judge of Jharkhand High Court, the facts in question are more or less on the same lines as the facts of the present case, as in the said case also the goods were reweighed at an intermediate station but no levy of punitive charges were made prior to delivery and only subsequently the Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 14 demands were made.
The important point to notice in the factual matrix of the present case is that no information regarding weighment or the excess loads having been found at an intermediate station had been given by the railway administration at Raxaul while delivering the goods to the petitioner and even as late on 30.4.2010 the railway administration at Raxaul had given a certificate to the petitioner regarding there being no dues against the concerned person with respect to the consignment in question. It was much later after three months that the demand notice was being raised with respect to overloading on the basis of weighment at Ram Kanali, an intervening station.
In this regard it would be useful to quote the provisions of Sections 73 and 78 of the Railways Act, which are as follows :
"73. Punitive charge for overloading a wagon.- Where a person loads goods in a wagon beyond its permissible carrying capacity as exhibited under sub-section (2) or sub-section (3), or notified under sub-section (4), of section 72, a railway administration may, in addition to the freight and other charges, recover from the consignor, the consignee or the endorsee, as the case may be, charges by way of penalty at such rates, as may be prescribed, before the delivery of the goods:
Provided that it shall be lawful for the railway administration to unload the goods loaded beyond the capacity of the wagon, if detected at the forwarding station or at any place before the destination station and to recover the cost of such unloading and any charge for the detention of any wagon on this account.Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 15
78. Power to measure, weigh, etc. - Notwithstanding anything contained in the railway receipt, the railway administration may, before the delivery of the consignment, have the right to -
(i) re-measure, re-weigh or re-classify any consignment;
(ii) re-calculate the freight and other charges; and
(iii) correct any other error or collect any amount that may have been omitted to be charged."
Section 73 clearly provides that the punitive charge for overloading a wagon may be recovered by way of penalty "before the delivery of the goods". Similarly, Section 78 provides a power to railway administration to re-measure, re-weigh or re-classify any consignment or re-calculate the freight and other charges and correct any other error or collect any amount that may have been omitted to be charged "before delivery of the consignment". The use of the words "before delivery of the goods" or "before delivery of the consignment" in the Sections has in my view a deep relevance. If any such demand is raised by the railway administration before the delivery of the goods, it would be open to the consignor, the consignee or the endorsee, as the case may be, to seek reweighment in terms of Section 79 of the Act to prove to the railway authorities that there has been no such overloading as has been alleged. If such demand is not raised before the delivery of the goods and the goods are delivered keeping the consignor, etc. completely in the dark about the goods having been Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 16 reweighed during the transit and excess load having been found then after the delivery of the goods it will not at all be possible for the consignor, consignee or the endorsee to prove to the railway administration that as a matter of fact there was no overloading. In such circumstances, it becomes totally a case of one party making a claim and treating the same as final without any real or effective right to the other party, i.e., the consignor or consignee or the endorsee, to disprove the claim by getting reweighed the same.
The Jharkhand High Court in the aforesaid decision in Jyoti Enterprises case (supra) has quoted the various paragraphs of the Railway Commercial Manual which provide for the railway administration to make surprise checks as also reweigh the goods. It has also taken note of the fact that if there has been such reweighment and excess load has been detected, in that case the communication should have been sent telephonically to the destination station which was not made in the case of Jyoti Enterprises nor it has been so made in the present matter. That being the position, it is evident that the present matter also is a case of gross laches on the part of the railway administration in not acting in terms of the Act as also the Manual and seeking to take advantage of their own wrongs by creating a situation in which the petitioner would be unable to rebut their allegation not Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 17 only regarding reweighment but of their being excess load.
So far as the question of lien is concerned, the same has been effectively dealt with in Jyoti Enterprises case (supra) and I agree with the view expressed by the learned Single Judge of the Jharkhand High Court in that matter. A statutory lien has to be strictly complied with and can be enforced only if there is strict compliance of the statutory requirement, which compliance has not been done in the present matter.
Thus the action of the respondents is not only in violation of the Act but also of the Manual issued by the railways itself and creates a situation where there is a violation of principles of natural justice as no effective right to be heard remains with the petitioner on the demand being raised nearly three months after the delivery of the consignment.
So far as the submission of learned counsel for the Railway on the point of post decisional hearing available to the petitioner is concerned, the same has to be rejected outright as such post decisional hearing would be a mockery of the right to give an effective reply since the goods were not available anymore for reweighment, except may be to challenge the correctness of recording by Weighbridge at Ram Kanali which does not appear to be an effective right of hearing in favour of the petitioner. Patna High Court CWJC No.15991 of 2010 (8) dt.06-08-2014 18
Thus, in the light of the aforesaid discussions, the writ application is allowed. The impugned demand notice dated 13.7.2010 and 1.8.2010 are both quashed and the respondent Railway is directed not to recover any additional or punitive charges from the petitioner with respect to the consignment booked with the respondent South Eastern Railway vide RR No. 212006502 dated 7.4.2010. The respondents shall also returnd the Bank Guarantee of the petitioner which was given with respect to the present transaction.
(Ramesh Kumar Datta, J) spal/-
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